Hospitals adjust to changing health care landscape

Changes in federal programs have area hospitals examining how they do business and making adjustments. The Affordable Care Act, designed to extend health insurance coverage to more people, and the American Recovery and Reinvestment Act, better known as the stimulus, both included regulations affecting hospital operations.

Changes in federal programs have area hospitals examining how they do business and making adjustments.

The Affordable Care Act, designed to extend health insurance coverage to more people, and the American Recovery and Reinvestment Act, better known as the stimulus, both included regulations affecting hospital operations.

Medicare and Medicaid repayments to hospitals were reduced in the Affordable Care Act. Political disputes that have led to automatic federal budget cuts are having an effect, too.

In response, hospitals are tightening their belts. They are opting to cut some services while adding others. Some have decided to align in partnerships.

“We have to do more with less,” Edward J. Roth III, president and chief executive officer for the Aultman Health Foundation, said of the situation hospitals face.

The nation’s health care system is caught in an evolutionary phase, said Thomas E. Cecconi, Mercy Medical Center’s president and chief executive officer. Change likely will continue for some time as the health care industry copes with outside forces.

Roth said hospitals are caught between two worlds. The old world was one where hospitals were paid based on the volume and received fees for services, while the new world has a value-based equation.

Instead of managing a patient’s specific episode, which might prompt a hospital stay, the goal is to manage patient care in a continuum, Roth said.

ECONOMY A PROBLEM

The nation’s sputtering economy has an impact on the health care industry, Cecconi said. When people lose jobs and benefits, they stop seeking medical treatment and getting regular checkups. That leads to increased charity care, which means financial loses for hospitals.

Hospitals have been forced to respond to the economy, Cecconi said.

Adjustments are being made related to inpatient and outpatient care. Hospitals have looked at how services are provided and what facility will service patients.

People who are very sick likely will face a lengthy hospital stay, Cecconi said. But there are more cases where no hospital stay is needed or patients come in overnight and then go home after treatment.

Those changes mean staffing must be reduced, Cecconi said. Reimbursement for services is different with hospitals being paid less for outpatient programs.

Less money from Medicare and Medicaid — because of the Affordable Care Act and budget cuts — also is making it tougher for hospitals. Aultman is anticipating a $4 million drop in payments based on a 2 percent budget cut.

Local hospitals are encouraged by Gov. John Kasich’s Medicaid expansion proposal.

The plan should help people in need visit doctors, use more hospital services and obtain preventive health care, said Susan Koosh, spokeswoman for Affinity Medical Center in Massillon. Kasich’s proposal would “help our community’s most vulnerable citizens secure critical health care services,” she said.

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Questions remain on how Kasich’s proposal will work, Cecconi said. The plan also has to make it through Ohio’s legislative budget battles.

RECORD KEEPING

Hospitals are seeing some financial benefits because of the health information technology program that was part of the recovery act.

The program is designed to improve patient care by creating an online system to share treatment information. It means better communications between hospitals and other health care service providers.

Cecconi said the switch to electronic health records is a good move that enhances patient safety. It’s easier to clarify medications and dosage, as well as to check on possible interactions. Better records also are a way to avoid unnecessary tests.

But the program has been expensive to implement, Roth said. Hospitals have been buying new equipment and software packages, paying for training and bringing in support staff. There also is lost productivity as staff learn the new system.

“Multiply all of that, it’s a huge expense,” Cecconi said.

The recovery act allocated money to help hospitals establish the systems. Hospitals benefit when they meet government deadlines.

DIFFERENT PLANS

Roth said hospitals everywhere are working on changes to deal with the challenge of delivering care. He’s confident that Aultman has a good plan in place to deal with the reduced revenue and other changes.

“It’s difficult in a situation where the numbers change from year to year,” Roth said. Expenses must be trimmed, and the largest expense is personnel.

Aultman has looked at staffing and is trying to stay efficient without compromising, Roth said.

Right now, Aultman has no plans to hire from outside unless a position cannot be filled from within. Plans are to reallocate staff as demand changes. Roth said he doesn’t expect to be laying off staff, but that Aultman could be reducing workforce through attrition as workers retire or leave.

Cecconi said Mercy has started a program to attract more doctors involved in primary care with the hope that more people will establish a good relationship with a doctor and receive regular treatment.

The goal is to have patients receive affordable care in a better setting, and avoid instances where patients are flooding emergency rooms for non-emergency services. That should help keep costs lower, Cecconi said.

Expanding Medicaid, as proposed by Kasich, could lead to people receiving regular medical care.

Mercy also has launched a program to improve its emergency department.

The area will be expanded with some services — radiology, for example — moved closer to the department. The changes should make it easier for patients to receive treatment and move them through the department faster.